More hotel collapses predicted

Hotel du Vin's woes are said to be just the beginning of troubles in the industry. Photo / Richard Robinson

Hotel du Vin may have to be run by the receivers for some time if a new buyer cannot be found, a hotel expert says.

Horwath Hotel, Tourism and Leisure consultancy director Terry Ngan said the boutique hotel, which went into receivership on Friday, was likely to be the first of more hotels hitting financial trouble.

Ngan said the first round of collapses had seen finance companies selling accommodation units into the market but now it was investors who were going into receivership.

He predicted the larger hotel owners would be next to go into distress mode. "As the trading conditions worsen there will be pressure on owners to pay back debt which might see them forced to sell."

But buyers were scarce as seen in the case of a Queenstown hotel.

The 66-room Queenstown Lodge and Apartments went into receivership on December 16 but more than six months later a buyer has still not been found and the receivers still run it.

"Increasingly we will see hotels managed in receivership or put on the market. But that doesn't mean they are going to sell."

Ngan said many owners had too-high expectations of the price they could get while potential investors were waiting on the sidelines. Ngan, at present attending the Australian Hotel Investment conference, said the mood in the industry was that the situation would get worse before it got better.

Latest accommodation statistics show room nights for hotels fell the most of all commercial accommodation in April, dropping 13,700 nights or 1.5 per cent. Average occupancy rate for hotels was 53.1 per cent.

Hotel du Vin, owned by wealthy American Ed Aster, continues to operate under the eye of receivers Kordamentha.